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Monday, 01 February 2016

IFC, Société Générale Invest in Burkina Faso’s Cotton Sector

IFC, a member of the World Bank Group, the Global Agriculture and Food Security Program' private sector window, and Société Générale today signed an agreement to provide a second €70 million trade facility to Burkina Faso's largest cotton exporter SOFITEX. The facility will assist the development of the agricultural sector and contribute to a reduction in rural poverty. Cotton is the main cash crop in Burkina Faso. The cotton sector provides a livelihood for more than 3.0 million people, and is the largest employer and the second largest foreign currency earner in the country. Shifts in global demand and commodity prices have made it difficult for cotton companies to secure financing, which can threaten the economic development of Burkina Faso, a country that recently went through political unrest. The €70 million facility will allow SOFITEX to purchase raw cotton for processing from more than 160,000 Burkinabe farmers and export the production to international markets. Through the facility, IFC, GAFSP and Société Générale will lend to SOFITEX against warehoused commodities, providing the company with liquidity to finance its crop purchases. It follows a similar investment last year, which helped to secure the export of a record 750,000 tons of cotton and to secure the livelihoods of 160,000 farmers. Aliou Maiga, IFC Regional Financial Institutions Group Head for Sub-Saharan Africa, said, “IFC's partnership with SOFITEX demonstrates our confidence in Burkina Faso's cotton sector and our commitment to support the economic revival of the country following a difficult period. Working with local farmers, suppliers and distributors, SOFITEX is playing a leading role in job-creation and rural incomes.”

Source: Star Africa